Frozen food chain Iceland also up for sale as Landsbanki sells off assets as part of winding up process

A ‘for sale’ sign has been raised over iconic toy store Hamleys by Icelandic bank Landsbanki, in the same week as advisers are poised to be appointed for the sale of sister frozen food chain Iceland.

The bank’s head of communications Páll Benediktsson said while Landsbanki has not yet started a formal sale process for Hamleys, in which it has a 65% stake, he said it will consider approaches. It has not yet hired advisers to sell Hamleys.

Hamleys, the 250-year-old toy brand, is one of the world’s most recognised retailers. A sale could attract interest from overseas investors as well as the UK.

The sale of UK retail assets is part of Landsbanki’s winding up process. Benediktsson said he expected a sale of Iceland, in which it has a 67% stake, to be completed this year.

He said Landsbanki expects both chains to attract substantial interest. He said: “The market is getting better so it’s time to start proceedings.

“These are highly valued and well-known companies. We get lots of requests and people are approaching us.” He would not comment on the price that Landsbanki is seeking for either chain.

Iceland, founded in 1970, has grown to about 700 stores and last year reported record pre-tax profits up 19.4% to £135.4m.

Hamleys declined to comment on any potential sale, while Iceland founder and chief executive Malcolm Walker said: “I don’t know anything about the chain being up for sale so I’m waiting to hear.”

Walker approached Landsbanki last summer with a £1bn bid to buy back Iceland, but his offer was rejected.

Benediktsson said that Landsbanki’s UK retail assets - which also include department store chain House of Fraser and jewellery group Aurum - are “very valuable”.

He stressed the bank is not involved in any kind of process to sell its share in House of Fraser, in which it has a 35% stake, and said there will be no change in that position until at least 2012.

Landsbanki also has a 66% stake in Aurum, the jewellery group that operates Mappin & Webb, Goldsmiths and Watches of Switzerland, but said there will be no sale of the business “for some time”.

However, Benediktsson said it is “very likely” that in the next three years Landsbanki will sell all its assets before the winding up process is completed, which is expected to be in the next four to five years.

The remainder of Hamleys’ 35% stake is owned by Pillar, a holding company of Banque Havilland - the renamed Kaupthing Luxembourg, which collapsed and was acquired by British investment firm Blackfish Capital. Icelandic bank Glitnir owns 9% of Iceland while Walker and the Iceland management team own the remainder.

Landsbanki collapsed in 2008 amid the Icelandic banking crisis that resulted in Icelandic investment vehicle Baugur, owner of UK retailers such as Oasis, Karen Millen and Warehouse, hitting the wall.